My List of Singapore's Top Dividend Stocks
Take some time to read and understand how I select my own list of top dividend stocks out of the 700+ listed companies in Singapore.
Singapore Government Linked Companies
If you are not financially inclined but want to invest in Singapore dividend paying stocks, consider companies that are under T-L-C.
No, it’s not the American pop group Tender-Loving-Care nor WWE’s Tables, Ladders and Chairs wrestling match.
Temasek Holdings is an investment company owned by the government of Singapore. It has substantial shareholdings in companies that are closely related to the Singapore economy.
Other than investments in Singapore, Temasek also has substantial investments in the rest of Asia and other emerging economies.
Don’t get me wrong. I’m not asking you to invest in Temasek Holdings. You can’t. But you can consider the Singapore listed companies that Temasek has a substantial interest in.
By investing in T-L-Cs, it does not mean that you are safe from market volatility.
But the financial integrity and reliability of these Singapore listed companies could be higher through the ownership by the Singapore government.
If you are unfamiliar with Singapore dividend stocks, these stocks would be a good place to start your investments.
Straits Times Index Component Stocks
The Straits Times Index (STI) was revamped in 2008 which made it effectively a blue chip index. It consists of Singapore’s top 30 stocks based on market capitalization and liquidity.
Some participants in the investment community use market capitalization to determine a company's size as it can help them to decide on their asset allocation and risk-return potential.
Historically, companies with bigger market capitalization have experienced slower growth with lower risk.1
As for liquidity, the STI is calculated by FTSE according to its internationally recognized methodology for liquidity criteria and free-float adjustment. The STI components are reviewed at regular intervals.
Other alternatives that also produce passive income streams similar to dividend paying stocks may include REITs, business trusts and bonds.
Singapore REITs and Business Trusts
Singapore-listed REITs offer investors access to a diversity of real estate assets including retail malls, office buildings, industrial properties, hotels, serviced apartments and hospitals.
Government Bonds and Corporate Bonds
If you are looking for a safety of capital while receiving periodic payouts, bonds may be a better choice.
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1. Investopedia Staff, Market Capitalization Defined, http://www.investopedia.com/articles/basics/03/031703.asp, accessed 04/01/2010.